Privilege and Merit

The news that Virgin Trains is to stop selling the Daily Mail is a pretty obvious distraction from season ticket price rises and the scandal of the East Coast franchise, however it does incidentally highlight the class association of the railways in popular discourse. It is important to note that while Virgin Trains offered the Daily Mail for sale to standard class passengers, it provided complimentary copies to first class passengers. The howls from Northcliffe House about "censorship" do not reflect the loss of the paltry revenue stream arising from the former, but the ending of the tacit endorsement entailed by the latter. In other words, this is about the loss of privilege rather than the denial of a human right and one that challenges the newspaper's claim to pre-eminence among the UK's middle-class readership. In claiming that its staff objected to the Daily Mail's content, Virgin Trains has endorsed the liberal activism of Stop Funding Hate (changing the world one informed purchase at a time), while stopping short of suggesting that its employees might have a say over its own offerings, such as its rip-off "free" Wi-Fi. In so doing, its implies that the Daily Mail may be less representative of "decent" opinion in Britain, which is an affront to the paper's self-image.

One point made with dull regularity when the annual price rises come round is that railways are a middle-class subsidy. This is true but irrelevant. So are roads and universities. Pretty much any public good tends to be exploited more effectively by the middle class, from the NHS to national parks, but that's not a sufficient reason to argue against public investment. The question should be whether the subsidy produces outcomes that benefit all. Railways bring wider gains for the economy and society than those that accrue to actual travellers. They allow for city agglomerations that enable larger and more specialised industries, which produces more jobs and higher average pay. The increased demand for rail travel over recent decades reflects the increasing proportion of service and professional jobs within the economy plus the related rise in property values in city centres. The result is more and more people needing to travel in from the suburbs or satellite towns. This is exacerbated in cities like London by the Green Belt, which obliges commuters to live further out, and by premium services like HS2 that seek to extend the outer limit of the commuter zone. Compared to the subsidy of the Green Belt, public spending on suburban rail travel is relatively modest.

One reason for emphasising the middle-class nature of rail travel is to suggest that the cost of nationalisation would disproportionately fall on the working class (and emblematic white-van drivers in particular) in the form of higher taxes, though as ever this avoids the broader question of incidence and the shift from wealth and income to consumption taxes. Public ownership of the railways is not a panacea, though it still has significant advantages over the use of private operators. What ultimately matters, as we saw in the 1970s and 80s, is the level of investment. The attraction of rail for both operators and financiers is the same: a natural monopoly with a guaranteed income stream. But a monopoly almost always under-invests, hence rail privatisation leads to a de facto state railway parasitised by rent-extractors focused on branding and public relations (hello, Richard Branson). The franchise model is particularly unsuited to railways because few operators can realistically bid, so there isn't a competitive market, and the strategic importance of rail transport means the state will always be on the hook, which allows private operators to bale out when their profits are threatened, as we have repeatedly seen in the UK.

The argument for introducing market discipline - that competition between suppliers will lead consumers to reveal their preferences - simply does not apply to railways. By dropping the Dail Mail, Virgin Trains is cannily giving the impression of a working market in which low sales have revealed its customers distaste for the paper: it has been judged on its merits. The same sort of thinking appears to lie behind the creation of the Office for Students, which has been in the news lately. The introduction of variable tuition fees has not led to the appearance of a dynamic price signal, largely because guaranteed student loans and earnings-related repayment mean that buyers aren't actually price-conscious (and accelerated two-year degree courses won't change that). Likewise, competition has not led to market exit by poor suppliers because supply, at the level of the individual college and within the limitations created by an annual buying round, is not elastic. University access remains a game of musical chairs in which some of the chairs are in a hard-to-reach annex. Like many other regulators, the job of the OfS will be to simulate competition in order to justify rent-extraction and to institutionally favour privileged suppliers such as Oxford and Cambridge.

The furore over Toby Young has been hitched to a variety of current phenomena, from Harvey Weinstein to campus free-speech, but the central argument concerns merit. To his liberal detractors, Young lacked both specific qualifications for the job and a reputation for probity and public service sufficient to be seen as one of "the great and good". This criticism not only elided the antagonistic purpose of the OfS but ignored the lesson of his father, Michael Young's The Rise of the Meritocracy: that all elites are self-perpetuating and merit is consequently less objective than we imagine. The younger Young's defenders (wisely) did not try to big-up his unimpressive work with free schools but instead lauded his free-thinking and "caustic wit". His supposed merit was his iconoclasm, which shows how merit can easily be interpreted to suit any agenda. Young's role as the little boy confronted by a naked emperor was intended to help improve the higher education sector by forcing it to "think outside the box", but that necessarily entailed criticising the academic and public service elite who have defined the boundaries of that box up till now.

Coincidentally, Young's appointment came shortly after the resignation as a government advisor of Andrew Adonis, the meritocrat's meritocrat, which perhaps created a contrast that was a little too stark for (liberal) public taste. Indeed, you have to wonder why the suddenly-available Adonis wasn't considered as a last-minute candidate for the OfS board role, even if anything other than chair (a role he allegedly lobbied for) might be beneath his dignity. Not only is he impeccably neoliberal and well-versed in the sector but he went out of his way to criticise "fat cat" vice-chancellors last year. I suspect the answer is that Adonis might take the brief to introduce competition, as opposed to merely simulate it, too seriously. His claims that university expansion was a mistake and that the sector operates as a price cartel were perhaps a little too iconoclastic (not to mention questionable) at a time when the government was more interested in beasting "snowflake" students as part of a misbegotten culture war. Both Young and Adonis have been left without plum jobs, but I doubt they will lose the privilege of having their fervid opinions relayed by the UK press, from the Guardian to the Daily Mail.

Running Out of Road

The "Uber endgame" is an increasingly ironic term used to describe how the San Francisco behemoth is expected to finally become profitable. This has evolved over time from simplistic stories of disruption (Uber will undercut traditional taxi firms because it has a cool app), through the promise of monopoly (having killed the competition, Uber will then jack up prices), to expansion into other transportation markets such as mass transit (UberPool reinvents the bus) and home deliveries. In its latest and possibly final incarnation, the phrase refers to the plan to start using autonomous vehicles (AVs), the expectation being that removing the cost of labour will finally allow the service to move from the red into the black. After the evidence of imperial overreach in its retreat from China last year (it sold its operations to the more successful native business Didi Chuxing in return for a 20% stake), and now the sidelining of its CEO Travis Kalanick for being a douchebag, there are hints that the company may in fact be facing an existential endgame. If it cannot crack autonomous vehicles, there are doubts that it can ever turn a profit and little evidence that it could spin another story to satisfy both investors and the tech media.

For all his evident faults, Kalanick had the chops to convince many people that Uber's ascent to global domination was inevitable and the chutzpah to finesse the repeated delay in reaching that goal. Just as the con-man relies upon the mark's credulity, so Kalanick deployed stories that dovetailed with wider claims about the economy, from the efficient exploitation of otherwise underutilised assets (the story that puts Uber and AirBnB in tandem) to the tendency of the modern economy towards monopoly (the one that equates Uber with Google). Even those sceptical of the company's potential see its CEO's fall as a representative story: "Kalanick’s management culture, while repulsive on many levels, was actually brilliantly aligned with its business strategy and its investors’ objectives. Companies that can make money in competitive markets by creating real economic value do not have to create ruthless, hyper-competitive cultures where there are no constraints on management behavior as long as they are totally loyal to the CEO’s vision and can rapidly capture share from more efficient competitors. None of Uber’s bad behavior was aberrant—it was a completely integral part of its business strategy. Without this culture, Uber would have never grown as rapidly as it has, and would have never had any hope of industry dominance".

Though Uber and AirBnB are often cited together in articles about the birth-pangs of the sharing economy they are quite different. AirBnB earns an agent's fee that depends on limited and immobile supply (property in prime locations) and the avoidance of regulatory overheads. Its real "users" are landlords sweating capital and avoiding tax. Its exploitation of labour is indirect, the result of traditional hoteliers under competitive pressure pushing down on employee wages and conditions, while its plans to evolve into a travel services business are likely to be complementary to those hoteliers. Uber's real users are not its "riders" but its drivers, who are labour in search of an income, and it is the company rather than the users that gains most of the benefit of regulatory arbitrage. Whereas traditional taxi firms would lease the cars to the drivers, giving themselves a fixed revenue while the drivers got the upside/downside on fares, Uber requires the drivers to provide the capital (the car) and then proceeds to take a cut on all fares. Uber's problem is that it has no real economies of scale. Indeed, it actually relies on the inefficient use of capital - i.e. the spare capacity of its drivers' cars. If that inefficiency were ever to be lessened it would have to increase prices or cut margins to attract drivers.

The just-so story of the sharing economy imagines an exchange between equals, but the reality is typically unequal when viewed in terms of capital and labour. The recent observation of Andy Haldane, Chief Economist at the Bank of England, that we are seeing the return of conditions familiar from the era before the industrial revolution, characterised by weak labour rights and flat wage growth, has much truth to it, but the near-bucolic emphasis on "artisanal, task-based, divisible" work elides the role of capital. An Uber driver who owns (or leases) his own car is comparable to a weaver who owned (or leased) a hand-loom under the pre-factory putting-out system. While the weaver had a degree of control over his working hours, he was also at the mercy of fluctuating piece-rates and required to advance cash deposits for materials. The "weightless economy" is not one in which capital has evaporated but one that no longer requires the concentration of capital and labour together. In practice, this means that as labour is atomised capital becomes ever more globally concentrated but also less visible (think of Google's data centres). The key to understanding Uber's endgame is as much about its potential concentration of capital as the atomisation of labour.

If you think of Uber's business model as parasitical - i.e. taking a cut of other businesses' revenue (the fares paid to self-employed drivers) by controlling prices and marginalising competitor intermediaries through market-flooding - then the current "endgame" looks surprisingly risky. Not so much because it alienates drivers but because it requires a capital-light company to become capital-heavy by owning autonomous vehicles. Up until now, the Uber value proposition has centred on capital gains through a future flotation and the promise of dividend yields should monopoly pricing ever arrive. The $13bn raised among investors to date was valued at $68bn earlier this year but has already slipped on the secondary market to $50bn. While a public offering is still likely, if only to raise the capital needed to buy all those robot cars, the focus of investors is shifting towards the longer-term return on capital post-IPO. Given that Uber isn't delivering a unique product and can't charge a premium for its basic service, this will mean raising the rate of capital exploitation. In practical terms, that means increasing the number of revenue-generating hours on the road.

The problem is that while customer demand can fluctuate up, a fact that Uber has exploited with surge-pricing, it can also fluctuate down. Up until now, Uber has been able to offload that "downtime" cost onto the drivers, but the AV endgame means it must absorb any under-utilisation itself, hence the diversification into moving goods (logically, when people are not travelling they are more likely to be receptive to deliveries). A further problem is that Uber can do relatively little to shift capacity to meet demand. While AVs will be more mobile than human drivers, it would be impractical to roam far as the transfer time would be revenue-negative. This points to the wider issue: Uber's lack of economies of scale that it can feasibly exploit. Indeed, if it shifts to being a capital-heavy company based on AVs its realistic leverage will be limited to lowering the cost of capital, probably through exclusive deals with selected motor manufacturers, however they may in turn push for a leasing arrangement that raises their own return on capital.

The AV endgame also requires a company that has been arrogant in its dealing with metropolitan authorities and state regulators to change its ways. It is one thing to bend the rules on taxis and ride-hailing, which will be seen by many as advantageous to paying customers and disadvantageous to often unpopular incumbents, but it is quite another to bend rules on passenger and pedestrian safety. Given the logistical challenges involved in the introduction of autonomous vehicles in urban areas, any firm that plans to operate a fleet of robo-cars in a city will need a good relationship with both the local authority and transport regulators. One way to achieve this might be to bid to provide mass-transit services, but the resulting conflict of interest between public and private provision could prove difficult to reconcile. The safest route would be to work with local government on AV systems that help moderate urban congestion. Kalanick's fall from grace may well signal a cultural shift at Uber but it is more likely that this is being driven by pragmatic concerns over future relationships with external parties not by any principled awakening to internal abuses.

I'm inclined to take a pessimistic view of Uber's future prospects. The AV nirvana may not arrive quickly enough, and at sufficient scale, to stop the business running through its cash pile, IPO or not. Even if it did, Uber isn't a technology leader and the most plausible scenario for future AV dominance is a tie-up between a business with leading data and sensor capabilities, such as Google, and an established motor manufacturer with advanced engineering capabilities, of which there are a number. Given that the ride-hailing sector remains competitive (see Lyft et al), it seems unlikely Uber can ever achieve a monopoly position and so dictate terms, and it is only maintaining its current market-leader position by heavily subsidising fares and drivers in a manner that is ultimately unsustainable. Indeed, it may already have peaked and the realisation may be dawning on many that it is essentially a bubble fuelled by a limited app and a well-known (if increasingly tarnished) brand. Assuming Google sees its future in selling smarts to car manufacturers, and further assuming that the future motor industry concentrates capital through AVs and an all-in rental model, then the smart move might be for a motor business (say Daimler) to buy Uber once its value drops far enough and so guarantee a large slice of the global market for its products. Uber looks like it is running out of road.

Banged Up

Since Plato's ship, means of transport have provided a wealth of metaphors for society in general and politics in particular. They create a temporary community of interest (even the lone motorist is sharing a road), engaged in a progressive project (getting from A to B, even if only to return once more to A) and obliged to submit to the authority of a leader (the captain, the pilot, the great helmsman). If the ship was the pre-eminent metaphor from the ancient world to early modern times (the ship of state, the ship of fools), the steam locomotive became the emblematic form of transport during the industrial revolution. This was because it represented bourgeois experience and therefore the public sphere of the limited franchise. Few workers could afford (or had need of) train travel until the twentieth century, and then usually only for holidays. Beyond shanks's pony, the bus (or tram, or trolley-car) has always been the proletarian means of transport, even after the decanting of old urban areas to the housing schemes and new towns. In the realm of metaphor, trains are still about class, bureaucracy and frustrated ambition (late again!), which means they have changed little in over a century.

The one means of transport that has been historically volatile both in reality and metaphor is air travel. While trains have remained essentially middle-class, because of the dominance of commuters, and buses have remained largely working class, air travel has evolved from the exclusivity of its prewar silver service days to the low-cost, no-frills experience of the modern era. The result is a more extreme social stratification than even British trains, with the well-appointed limousine of first class a short walk, via the wannabes of business class, to the cattle truck of standard class. This makes the aeroplane a perfect microcosm of society and a theatrical focal point. It also makes it ideal as a site of jeopardy, hence the ever-popular mid-air disaster trope (snakes!, on a plane?) and our morbid fascination with actual crashes. Air travel remains statistically safe, not to mention fast and efficient, but we assume the experience must be stressful and dangerous, hence a passenger forcibly ejected by United Airlines can get away with claiming that the experience was "worse than the fall of Saigon".

Starting in the 1970s, planes also became one of the frontlines for deregulation, particularly in the UK and US, heralding the way for the emergence of new operators like Virgin Atlantic in the 1980s and then a variety of low-cost operators in the 1990s, particularly in Europe. A consequence of this was that air travel was increasingly presented as a laboratory experiment for economic theory, not only in respect of the wonders of competition but also in terms of consumer behaviour and rational choice. The emergence of no-frills flying was attributed to the revealed preference for low-price over comfort, over-booking was rationalised by the calculation that not every buyer will utilise their purchase, and compensation for flight-bumping assumed that a market will clear at the right price. The results of deregulation have been mixed. In reality, flying remains highly regulated, for obvious safety reasons, while the constraints on airports and routes mean that cartels and monopolies are the norm. Service quality, at least for standard class passengers, has steadily declined, while long-haul prices remain stubbornly high. Low-cost travel has been a plus in Europe, however it would be a wrong to claim that this arose from deregulation. The single market and the fall of the Berlin Wall were clearly decisive.

The decanting of Doctor Dao by United Airlines revealed two truths about capitalism. According to economic theory, having failed to get any further volunteers to disembark at the initial offer price of $800, UA should simply have steadily increased the price until someone stuck their hand up (and if more than one person did, drawn straws to pick the winner). In the event, the airline simply decided to enforce the standard terms of their contract (you have no right to fly) and their property rights (a refusal to leave on demand is trespass). UA's claim that Dao was "belligerent" suggests they were framing the problem in these terms from the off. Bumping is usually done on the terminal side of the gate, once the number of checked-in passengers is known, which makes it psychologically easier to handle for all parties. It appears UA caused the problem by deciding to board four of their own staff at the last moment (so the flight wasn't technically "oversold"), thereby claiming superior privilege. This would be like a hotelier kicking you out of your room because his mother-in-law had turned up unexpectedly.

This highlights the first truth about capitalism. Corporations don't instinctively think in terms of markets and trade-offs, they first and foremost think in terms of property rights. Much of the outrage in this case arises from a similar instinct in the public mind. We assume that a purchased ticket is a form of property, not simply because we don't read the contractual small print, but because we treat it as a token of value, like cash, rather than a permission that can be rescinded. That UA should have then misdirected Doctor Dao's luggage - his own property - is an irony apparently lost on the company's critics. The Dao case, even if it is settled out of court, is likely to be extensively written about as a contest of rights, but it is unlikely to lead to any change in industry practice or the law. This is because all parties see property rights as sacrosanct and they accept that "reasonable and proportionate" force (or resistance) is legitimate in defence of those rights. The questions arising concern whether the airline should have incurred a greater cost up-front in terms of passenger compensation and whether the force used was justified.

The second truth is that capitalism depends on the threat (and often routine execution) of violence, but this vignette of brutality is unlikely to prompt calls for anything other than a better capitalism, which is another way of saying a capitalism that is less overtly violent, not one that eschews violence altogether. Predictably, other airlines have trolled UA by implying that they would have acted more humanely, which is an admission that they consider humanity a service differentiator rather than a non-negotiable expectation. The implicit message to consumers is that they must choose wisely or face the possibility of inhumane treatment. The question of prejudice and stereotyping has been raised, i.e. was Dao picked on because he was Asian, though like the absurd parallel drawn with Rosa Parks, this appears to be nothing more than a deflection from the central issue of violence. The Doctor was in the wrong place at the wrong time, in UA's view, and that alone appears to have been considered justification for his rough handling.

The desire to avoid confronting the importance of violence to capitalism's smooth (or not so smooth) operation means that victim-blaming of the individual easily expands into victim-blaming of all travellers. The trope of air travel as a self-imposed penance for cheap flights was quickly normalised with the emergence of no-frills flying in the 1990s, to the point that Ryanair adopted it as an anti-USP. That the company has since made a volte-face towards customer service is less a Pauline conversion than an admission that maintaining a high media profile necessitates novelty: learning the value of niceness is just another story. I fully expect Michael O'Leary to come up with another PR-friendly wheeze in due course. Though he has long been happy to play the bastard, and now the prodigal, O'Leary would never make the mistake of playing the thug, as United Airlines has. All publicity really isn't good publicity if it reveals what we don't want to acknowledge. We're happy to be accused of being cheapskates by a cheapskate, but we're not happy to be cast as the meat in a corporate sandwich.

What Ryanair's notorious extra charges highlighted was the passenger's dilemma: that a higher price is usually a poor deal because the gain is either small or unreliable. The best in-flight food is inferior to a mediocre restaurant, the in-flight entertainment is worse than your own smartphone, and even a first class bed is no better than an old railway couchette. In other words, capitalism is unable to deliver a better service in air travel so it is obliged to make a virtue of poor quality through an emphasis on low-cost. This development has happened in parallel with the imposition of tighter security post-9/11, with the result that air travel is increasingly viewed as an experience that must be endured rather than enjoyed. Given the many parallels with prison - the security check, the confined space, the lack of exercise - it is no wonder that it is becoming increasingly coercive in style, and no wonder that dissent is met by force. I predict a riot.

A Genuinely Interesting Post About Car Insurance

Car insurance is so crushingly dull that it has given us some of the most annoyingly crazee TV adverts in history, from Russian-accented meerkats to Iggy Pop's homunculus. I imagine if you're an advertising executive it must be a dream gig: there is no constraint on your imagination and zero risk that you might inadvertantly sully the reputation of the industry. If Michael Winner couldn't queer the pitch, who could? The japery is intended to convince us that car insurance is a necessary evil, so we may as well laugh about it, and not an extortion racket that amounts to roughly 1% of GDP in developed nations. The insistence that we don't think too hard makes it akin to new technology hype, so stories that combine the two, such as asking if driverless cars will be "the death of the insurance industry", almost write themselves.

That particular apocalypse arises from the premise that driverless cars will reduce accidents. The figure of a 90% reduction is often bandied about, but as I've previously noted, this is as reliable as tobacco industry-funded research showing that cigarettes are good for you. It's frequently elided with the vaguely similar claim that 90% of road traffic accidents are caused by human error, which actually means nothing. No doubt 90% of future robot malfunctions will be traced to human error, just as most smartphone or computer failures can be today. I imagine 120 years ago evangelists for cars were suggesting that they would reduce road fatalities by eliminating the risk of horses bolting. The one reliable statistic in all this is that 90% of what you read or hear about driverless cars is cobblers, quite possibly including this post.

According to The Guardian business pages, "The boss of one big motor insurer confessed privately a few months ago that he was mystified as to why his supposedly long-term shareholders never asked him about the threat that driverless cars present to his industry". This may be because they're not idiots. The fundamental assumption behind the "threat" is that fewer accidents mean lower premiums, but this doesn't represent a problem for the insurance industry because fewer accidents means fewer claims. In other words, turnover may reduce but profit margins can be maintained. In fact, the insurance industry might even experience a period of increased margins if it captures the initial efficiency gains of autonomous systems - i.e. premiums may prove "sticky". But while the prophets of doom may well be wrong, insurance does offer a useful angle to think about some of the impacts of driverless cars.

One promise of the robo-chauffeur is that we can move away from sole ownership towards an on-demand model. This idea is already emergent in car-clubs like ZipCar and hire services like Uber, not to mention leasing deals that cover repairs and allow the car to be replaced at the end of the initial lease term. An on-demand model doesn't just commodify the car as a series of rides, it theoretically reduces the number of cars required per capita and increases their utilisation, which will shorten their effective lives. A reduction in the amortisation period, together with the addition of autonomous systems, is likely to result in more expensive cars, while the increased technical complexity of those systems and the heavier wear and tear on the vehicles (even allowing for smoother handling by your robot Parker) will push up repair costs.

An overnight switch to driverless cars is logistically impossible, so the most likely scenario is a gradual transition, i.e. parallel running of "dual mode" cars with older manual vehicles (it doesn't matter for the moment whether the two types share road space or are segregated, though that would have a bearing on accidents). Given the expectation of lower premiums for driverless cars, this logically suggests two classes of insurance premium. But this class distinction will relate to the car, not the driver. This, together with the growth of on-demand cars, will reinforce the idea that insurance should be associated with the vehicle rather than the person, while the higher servicing costs will encourage the idea that this insurance should be extended to cover no-fault repairs. This has already prompted some insurers to suggest that liability for a driverless car should lie with the manufacturer, not least because this removes any dispute over the contribution of the autonomous systems in the event of a claim.

In other words, the anticipated fall in driver premiums (i.e. third-party cover) may be offset by an increase in repair premiums, and that increase may be folded into the cost of manufacture as a mandatory lifetime premium (in the way that a warranty is factored into the sales price today). Car insurance could simply dissolve into the cost of the car and by extension the pay-as-you-drive service. This trend would be reinforced if the need for regular autonomous system upgrades (a mix of hardware, firmware and software) further reduces the effective life of a car because it's simpler to deploy a newer model than rip out and replace its embedded systems. Though the cost of cars may increase with the addition of autonomous systems, their commercial treatment may paradoxically become more like that of commodities that have seen steady declines in their real cost, such as computers.

A consequence of this shift in the insurance model may be that car repair businesses will prove to be more vulnerable to disruption than insurers, both because technical complexity will drive many low-end operations out of the market and because insurers could negotiate better prices with larger repairers through volume deals. The repair companies best placed to negotiate with the insurers, and to bring expertise and volume to bear on costs, will be the car manufacturers. In other words, a likely consequence of driverless cars will be the disapperance of independent garages. Given the tighter relationship between car-makers and insurers, it may also make sense for large manufacturers to go into the insurance business themselves, much as they've already entered the financing market, extending their current provision of service plans to comprehensive service, breakdown and accident cover. The automotive industry has been shifting from commodities to services for decades, so absorbing insurance broking is a logical next step after absorbing premiums into the ticket price.

Another straw in the wind is the development of user or usage-based insurance (UBI), which uses sensors and telematics to analyse driver behaviour and tailor an insurance premium accordingly. Behaviour may currently be little more than the number of miles driven (i.e. connecting the odometer to the Internet), but it can also be extended to analyse driving style (e.g. frequency and strength of braking) and to adjust expected behaviour based on the outside environment (e.g. speed relative to road type). This is another example of the behavioural surplus of surveillance capitalism and how it can be monetised as a prediction product. While the current focus is on insurers as buyers of that product, there are many other possible applications and therefore buyers, particularly if feedback can be given to a hands-free occupant ("turn off here to buy that thing you want").

Driverless cars introduce data capitalists to the motoring industry, which is why Google and Apple are at the forefront of developments. Despite the hype about its prototype cars, Google's likely strategy is to sell autonomous systems (think of them as "appliances", in tech-speak), together with their superior data assets, to traditional car manufacturers. Apple's history is of a manufacturer that expanded into data, but by the specific strategy of locking-in its customers through proprietary technology. While it may be able to develop an iCar, this will probably be a high-end luxury good but quite possibly inferior to what the car manufacturers can produce themselves through the combination of their own technology and buying in Google's, in which case the iCar may prove to be as niche as the iWatch.

Google's model is egalitarian insofar as it wants everybody to provide it with a behavioural surplus. This means that it has an interest not only in making driverless technology available to as many car manufacturers as possible, but also in lobbying governments to move towards making autonomous systems mandatory. This will be easier to do if more people forgo owning a car in favour of hire services, and that means shifting towards inclusive (car-specific) insurance. Apple's model is elitist insofar as it only wants the behavioural surplus of high-worth users. This means it has an interest in driverless cars being introduced through segregation, i.e. in central urban areas favoured by the rich, but it will also want to monopolise the behavioural surplus by excluding third-party services. To that end, folding third-party insurance into an all-inclusive lifetime warranty (i.e. bumping up the ticket price) makes commercial sense.

In either scenario the motor insurance industry could be absorbed into the car manufacuring industry, but it could just as easily revert to a specialist wholesale service, invisible to the wider public, that pools risk for all car-makers, driverless technology manufacturers and data providers. This would make a lot of sense given that a single failure in future autonomous systems has the potential to produce widespread chaos and consequently very large claims (think of the Toyota and VW scandals of recent years). The motor insurance industry isn't going to disappear because of driverless cars, but it is likely to change radically. However this plays out, the one thing that would probably disappear (though this may just be my bias talking) would be those annoying TV adverts. Huzzah for technology.

Loosening the Girdle

The London green belt was originally envisaged in the late 19th century as an amenity for city-dwellers rather than a cordon sanitaire to protect the rural. Though the Ringstrasse of Vienna and the parkways of Washington are sometimes cited as inspirations, the "green girdle" proposed for London was to be placed much further out, beyond the working class districts, rather than between the elite-dominated centre and the peripheral industrial areas. The aim was to improve the health of the working classes, rather than isolate them, through access to fresh-air and exercise, and was given political impetus when recruitment during the Boer War revealed poor levels of fitness among the urban poor, prompting a Parliamentary Committee on Physical Deterioration in 1903. This reinforced existing concerns over national decline (arising from the advance of the USA and Germany) and would provide a background hum to the Liberal government's welfare reforms after 1906, including the Housing, Town Planning, &c. Act 1909, which banned "back-to-backs" and required local authorities to draw up town plans.

The green belt was a progressive cause, but one more influenced by the eugenic concerns of the Fabians (improve labour) than the bucolic socialism of William Morris (improve life). It also found common cause with conservatives worried more about "racial decay" than rural preservation. As a practical policy it went hand-in-hand with slum clearance and quality public housing, hence it was championed by the likes of Herbert Morrison's LCC in the interwar years, leading to the Green Belt (London and Home Counties) Act 1938, which empowered local authorities to buy land to be kept free from development. This public health focus was reinforced in the 1940s by a renewed desire, occasioned by wartime rationing, to maintain agricultural land close to the city to provide fresh food. However, this also marks the transition in the concept of the green belt from an urban resource to a strategic resource in its own right. Green belts were formalised nationally in the Town and Country Planning Act 1947, which also provided the foundation for the modern system of planning controls.

From the 50s through the 70s, urban populations were partially decanted to new towns as the old city slums were cleared, with the green belt providing a way of ensuring that the likes of Harlow and Stevenage developed as distinct centres rather than just exurban sprawl in the US manner. It is during this postwar period that the idea of the green belt as a restraint, rather than an urban amenity, takes hold, both in the sense of containing the social ills of inner-cities (increasingly associated in the popular imagination with Commonwealth immigrants) and isolating the decanted working classes in the often under-equipped new towns. The implementation of green belts became government policy (i.e. a central push rather than a local authority pull) in 1955 under the Conservatives, marking the inflexion point in attitude. The era also saw a significant improvement in urban health, due to the clean air acts and the spread of indoor plumbing, while mechanisation reduced the population of farm-workers. These developments replaced the old social dichotomy of unhealthy city and healthy countryside, embodied in the pasty-faced street urchin and the ruddy-cheeked farmer's child, with an aesthetic distinction of the built environment: the glass and concrete city and the increasingly faux-rural exurbs.

In the 1980s, the value of the green belt as an urban "lung" continued to decline as deindustrialisation reduced pollution, while the growth of imported foodstuffs reduced the land's agricultural utility (if not its market value). As the health and recreational justifications of old lost their weight, the cause of environmental protection gained prominence, encouraging the idea that as the green belt was a good in itself it should be expanded where possible. In fact, much green belt land is of no more ecological value than an urban brownfield site (and sometimes less). The consequence is that the land designated as green belt has more than doubled in size since 1979 and now accounts for 13% of the total land in England. In contrast, only 10% of land is developed (which includes roads and urban green spaces), while national parks account for 9%. That the last 30 years have seen persistent political pressure to expand the green belt (and simultaneously improve transport links) indicates that its main purpose had become that of a low-density housing zone for wealthier urban workers and the site of a growing professional services economy.

The London green belt is now over 5,000 square kilometres in size, which means that it is three times as big as the urban area it surrounds. This is enough space to build as many homes as already exist in the entirety of the UK at current densities: around 27 million. 7% of the London green belt is made up of golf courses, which means that surrendering half of them would provide enough land for 1 million new homes. It is estimated that there is enough developable land within 1 mile of existing railway and Tube stations, and within 60 minutes journey time of Central London (a radius of 90km), to build 2.5 million new homes. 22% of the land within the GLA boundaries is green belt, which constitutes an area large enough to support 1.4 million additional homes. Having declined from 8.2 million to 6.6 million between 1951 and 1981, the population of the capital bounced back to 8.2 million in 2011 and is expected to exceed 9 million by the time of the next census in 2021.

The idea of the green belt as an "interzone" between city and country has long gone. Improvements in transport have pushed the commutable boundary much further afield (Crossrail is designed to serve the green belt as much as the metropolis). At the same time, improvements in communication have amplified the value of agglomeration in city centres, leading to the growth of global hubs, such as the City. The consequence in London is the emergence of concentric rings of wealth, the inner boroughs and the green belt, sandwiching a ring of outer boroughs with an increasingly low-paid "service" population. The Tory plan to extend right-to-buy to housing associations, and require further council sales to fund the promised discounts, will exacerbate this by reducing the remaining pockets of social housing in the inner boroughs. The inner city is increasingly the inner-outer city, to be found in Mitcham and Leyton rather than Brixton or Bethnal Green. Gradually, London is replicating the social geography seen in New York and Paris.

The historic irony is that a legacy of early nineteenth century pro-social reform and mid-century central planning became a key tool for the protection of class interests antagonistic to the poor and the state. This is nowhere more obvious than west of London, specifically the area bounded by Reading, Slough, Heathrow and Bracknell. One objection to the expansion of Heathrow Airport is that it would take a nibble out of the green belt. A more ambitious plan would see the entire area developed, centring on the corridor of the M4. Of course, this would mean development around Windsor and Eton, which appears to be a no-go for some strange reason (maybe something to do with Legoland). Compare and contrast with the long-standing government encouragement for development east of London, the so-called Thames Gateway, which covers an area of significantly greater ecological value along the banks of the Thames estuary.

The obvious conclusion is that not all parts of the green belt are equal, which appears to be the position of its modern defenders to judge by their willingness to countenance land-swaps. According to Simon Jenkins: "Those of minimal amenity value would be released in favour of belt extension elsewhere. It is stupid to guard a muddy suburban field while building over the flanks of the Pennines". Despite the reference to ancient limestone, this attitude clearly reflects on the social value of land as a commodity rather than the intrinsic value of the natural environment, hence the paradigm of trade and stock management. By "amenity" I suspect Jenkins means the outdoor pursuits of the middle-classes, though he probably has fell-walking and horse-riding in mind rather than paint-balling or golf, which is an echo of the "improving" visions of the Edwardians who rhapsodised about Sunday school trips to a bluebell wood.

Jenkins has long insisted that the UK's housing crisis is a problem of poor urban resource management, and thus implicitly of selfish townees. There is some truth in this, however it is easy to fall into the trap of assuming that the solution to an urban problem lies within the urban area, and to in turn assume that "urban" and "green belt" are mutually-exclusive. This is to continue the thinking of the late twentieth century and see the green belt as a check on the ill-discipline of the city. For example, under-occupancy is often discussed as a urban issue, in the context of the bedroom tax and foreign investors, but empty rooms are more common in owner-occupied properties in the green belt. The structural causes of the under-provision of housing are not limited to cities, let alone London: regressive property and inheritance taxation; high land prices and no penalties on under-use (which leads to land-banking); and a cartel of private builders with insufficient competition from local authorities.

The solution to the housing crisis, particularly in London, requires us to return to a view of the green belt as a resource for the city, not a restraint. This doesn't mean throwing up a couple of million homes willy-nilly around the M25, but expansion along the axial transport corridors that already exist to Reading, Crawley, Luton and Southend. This would be a return to the development pattern that predated the postwar green belt, with houses and light industry following first the railways and then the new arterial roads. The green belt also provides the opportunity to build a high-speed orbital rail line linking London's airports and reducing traffic through the city centre, but given the political trouble that relatively small-scale incursions into the green belt like Heathrow and HS2 have produced, the suspicion is that wholesale reform will continue to nestle in the long grass. That both leading candidates for the London mayoralty, Sadiq Khan and Zac Goldsmith, are on record as considering the green belt "sacrosanct" is not encouraging. We're not protecting nature, we're merely privileging property.

Terms of Trade

The recent scenes at Calais, of queues of goods lorries and desperate migrants, remind us that migration and trade are intimately linked, but this is a truth that we spend a lot of time glossing. Even those sympathetic to migration on humanitarian grounds can be delicate about the economic realities. For example, FlipChartRick has pointed out that Theresa May's proposal to "help African countries to develop economic and social opportunities so that people want to stay" will actually stimulate greater migrant flows because, as incomes converge, more Africans will have the wherewithal to pay for transport across the Mediterranean. This is right but incomplete. The relative cost of getting to Europe for an African migrant is a factor both of her wealth and the price of transport (whether an airline seat or a cramped bench in an open boat). Trade lowers transport costs, both because of economies of scale and the impetus to productivity improvements. In other words, the dynamic is equal parts push and pull.

Rick is essentially employing the "rising expectations" theory of social change, which dates back to Alexis de Tocqueville's L'Ancien Régime et la Révolution of 1856. As people's expectations rise (represented here by disposable income), so they become restless and ambitious. There is a similarly antique flavour to much of the other material that Rick quotes in his post. For example, a Wall Street Journal article on rural Senegal: "Flat screen TVs and, increasingly, cars—mostly purchased with money wired home by villagers working in Europe—have reshaped what was once a settlement of mud huts. The wealth has plugged this isolated landscape of peanut farms and baobab trees into the global economy and won respect for the men who sent it". Mutatis mutandis, a similar article could have been written about Sicily in 1900 (feel the respect) or Ireland in 1960. This is a trope in which labour is exchanged internationally for commodities, thereby introducing the market economy into hitherto backward areas (mud huts, no less). It's the cousin of the gift of civilisation trope, in which the intrepid explorer takes a gramophone into the jungle to introduce the benighted natives to Caruso.

Another quote from South Africa's Mail & Guardian has a similar sense of the bleedin' obvious being rediscovered: "One of the more intriguing nuggets about the Africa emigration story is that far from fleeing poverty, migrants out of the continent are likely to be relatively well off, and are rarely from the most destitute families". Migrants tend to be younger, fitter, better-educated and more qualified than the norm in their home country. Twas ever thus. This applies both to economic migrants and refugees, with the latter tending to be relatively better off but persecuted groups rather than the poorest segments of society or marginalised minorities. For example, there are more urban Christian refugees (often middle-class) than rural Yazidis fleeing Syria. The chief difference between economic migrants and refugees is that the former tend to be more optimistic, essentially because they are leaving of their own free will. They literally have the "get up and go" spirit that Norman Tebbit so admired. It is this optimism that in turn fuels their willingness to take risks, jumping trains or trying to walk the length of the Channel tunnel.

My favourite quote in Rick's post comes from a Nairobi-based NGO: "Modern mobility is also empowered and inspired by unprecedented levels of connectivity – particularly through email and social media – and the virtual proximity of a seemingly obtainable better life. Immeasurable though it may be, we cannot underestimate the force of aspirations, dreams and adventurism of many young people stuck in what they regard as politically restrictive, socioeconomic backwaters". If you substituted "the postal service and cinema" for the contemporary wonders of technology you'd find yourself with boilerplate that could have been used at any point over the last one hundred years. You'd also be able to use it in the context of intra-national migration: "stuck in what they regard as politically restrictive, socioeconomic backwaters" could have come from the synopsis of most provincial UK novels published in the 50s and 60s (think Keith Waterhouse, Stan Barstow et al).

Where once we blamed racy novels and Hollywood for filling our young peoples' heads with dreams, now we blame satellite TV and Facebook. To assume that "unprecedented levels of connectivity" have produced a sudden awakening of aspiration and therefore a boost to migration is ahistorical. I had a childhood friend who emigrated to Canada in the late-60s, who was equally excited by Jack London's White Fang and Walt Disney's True-Life Adventures. His family returned after a couple of years, having failed to settle (his souvenirs included a genuine parka and a 6" Bowie knife). The point is that they could afford to do so, the cost of transport having fallen over time, so emigration was no longer a one-way ticket. The 70s saw the end of assisted migration schemes like the Australian Ten Pound Poms programme, and also the increase in repatriation by migrant pensioners, notably to the West Indies and Ireland. All of this was driven by falling transport costs which were in turn a reflection of the early stages of globalisation.

Rick could also have pointed out that as a nation develops, more of its workers will have tradable skills, a fact that the NHS is relying on over the coming decades. The dependence of the health service on migrant labour is often deployed by pro-immigration advocates as if the pro-social nature of the job should make a difference (it's the forgivable counterpoint to media tales of "foreign criminal gangs"), though it strikes me as a risky strategy because this reminds people of infection. The fear of migrants is not just simple xenophobia but a rational appreciation, based on solid history, that you cannot trade without the risk of spreading disease, hence our continuing fascination with flu outbreaks and spiders in bananas. But we over-estimate the probability of infection, and the prevalence of social ills, partly because we project our ambivalence about trade (exploitation, food-miles, the loss of domestic jobs) onto migrants. While it is certainly wrong-headed to see migrants as economic competitors in aggregate, the bigger cognitive failure is to imagine that we can have the benefits of global free trade, from kiwi fruit to Spotify, without an increase in international labour mobility.

This gets to the nub of the issue, which is that nations with complex economies are inevitably driven to greater trade in order to maximise their absolute and comparative advantages (a fact recognised since the days of Adam Smith and David Ricardo), hence the secular trend towards larger free trade areas like the EU and multilateral treaties such as TTIP. This applies to factors of production as well as products and services, something which the EU's "four freedoms" (goods, services, capital and labour) explicitly acknowledge. The era of globalisation is the era of migration, from the Mediterranean to the Rio Grande, from the Baltic to South Africa. In the UK, successive governments have struggled with the contradiction of a neoliberal commitment to free trade and a conservative prejudice against incomers, producing a variety of faux-pas from Gordon Brown's "bigot" to David Cameron's "swarm". This reaches a pitch of inanity in the UKIP claim that "Outside of the EU we could control our borders whilst ensuring that free trade continues without free movement of people".

It is no coincidence that the UK's pre-eminence as a trading nation coincided with its openness to migrants, famously including Karl Marx among the many undesirables, nor that it started to introduce immigration controls (the Aliens Act of 1905) at a time when it was facing growing market challenges from the US and Germany and consequently attracted to protectionism (the Tariff Reform League was founded in 1903). The last large-scale attempt to expand trade while minimising migration was the clumsy arrangements negotiated between the European Community and Comecon in the late-80s, which were little more than disguised aid. What advocates like Nigel Farage are really after is free trade for the City and an impossible blend of pro-SME import substitution and favoured multinational brands for the rest of the country. In contrast, Donald Trump's plan to slap tariffs on Chinese imports to the US and build a wall to keep out Mexican migrants is a model of internal consistency.

Passport to Pimlico

Wandsworth Borough Council is pushing ahead with plans for a new cycle and pedestrian bridge across the River Thames, connecting Nine Elms to Pimlico. A number of crossing points are being considered, but the most likely is between the under-construction US Embassy on the south bank and Dolphin Square on the north bank. The new embassy is a shiny cube that looks like a next-generation games console and is expected to act as the seed for a new diplomatic quarter as other national missions seek respite from the high rents of Belgravia. Dolphin Square is currently in the news as the alleged scene of murderous sex parties involving MPs in the 1970s (coincidentally, my paternal grandfather, a peripatetic Irishman, worked there as a porter between 1947 and 1956).

The bridge will intersect with Cycle Superhighway 8 (currently just blue paint), which runs from Ram Street in Wandsworth to Millbank in Westminster via Chelsea Bridge. Ram Street takes its name from the Ram Brewery, on the east bank of the Wandle River, which was owned by Youngs from 1831 to 2006. There has been brewing on the site since the 16th century, and Youngs still used horse-drawn drays for local deliveries until the eruption of road-rage in the 1990s. The brewery is currently being redeveloped into a 36-storey block of flats and various retail opportunities, though it will retain a brewing museum and a "micro-brewery". In contrast, Millbank is the gateway to the central "government district", bounded by Pimlico, Victoria and Charing Cross. Back when Youngs shipped their first cask, it was the site of the original "National Penitentiary" until superseded by Pentonville. The CS8 runs straight from beer to prison.

The bridge is symbolic in creating an umbilical link between the Conservative's traditional flagship councils in London, Westminster and Wandsworth, both of which enjoyed covert government financial support under Thatcher and Major following the introduction of the Poll Tax and later the Council Tax. However, the ruling Conservatives on Westminster Council do not appear keen on the proposal, presumably because there are few obvious benefits for their residents. There are only so many times you can find an excuse to pop into the US Embassy. The Transport for London feasibility study is lukewarm, noting that the height clearance needed for the bridge will necessitate stairs, ramps or possibly lifts that may make it less attractive to the key users, namely cyclists who want to avoid vehicle traffic on Chelsea and Vauxhall bridges.

The public consultation for the Nine Elms to Pimlico bridge (or "NEP Bridge", as we are urged to call it in ironically Bolshevik style) included a short exhibition of the competition entries (just concept art, really) held first on the north and then on the south bank. I attended the latter showing, in a community centre on the Patmore Estate between Battersea Park and the New Covent Garden fruit & veg market. It is unlikely many of the estate's residents, or those from the social housing along the Wandsworth Road, will use the new bridge, simply because the railway viaducts between Vauxhall and Queenstown Road, buttressed by the bulk of New Covent Garden, make access to the riverside difficult. Most people simply get the bus to Vauxhall and cross the river from there. In reality, the Nine Elms development is creating an enclave of Central London (or international capital, if you prefer) south of the river, not unlike an enclave of Burgundy in Pimlico.

The major transport upgrade in the area will be the Northern Line extension, which will create a new Nine Elms station on Wandsworth Road next to the current Sainsbury's and a new terminus at Battersea Power Station (the two new stations will be either side of the tracks and clearly serving different communities). For residents of the infamous new flats being built around the old power station, this will mean a pleasantly short Tube journey to either the City or the West End. For those heading to Westminster, it's a 30 minute walk via Vauxhall Bridge. The new foot and cycle bridge might shave 5 minutes off this time. Despite the meagre benefit, the TfL feasibility study heroically assumes that the economic dividend accruing from this will more than pay for the £40m bridge over a 60-year lifetime. 

Given that the distance is too short to make a local bike journey worthwhile for the lycra crowd, and that cyclists on the longer CS8 route will continue to use Chelsea Bridge, this looks wildly optimistic. Unless the bridge is a destination in its own right, which means it will probably cost a lot more than £40m to achieve the wow-effect, I doubt it will be much of a draw for pedestrians either. No doubt it will be a lovely stroll to work if you are an embassy understrapper and can afford a flat in Dolphin Square, but half the attraction of this pleasant commute will be its exclusivity. I suspect TfL are unconvinced by their own case (they are far more focused on the Tube extension) but have come under pressure from Ravi Govindia, the Wandsworth Council Leader, and his Tory chum at City Hall. For the Mayor, this is PR catnip: artistically-inclined civil engineering, urban regeneration waffle and cycle lanes.

The redevelopment of Battersea Power Station and Nine Elms is a continuation of Wandsworth Council's strategy of piling up expensive blocks of flats along the riverside. This has made the borough top-heavy, entrenching the Tory majority (Labour last held power in 1978). Most of the Labour voters are clustered in the south of the borough around Tooting, or in the west in Roehampton, with isolated pockets in the old council estates hemmed in by the new flats in Wandsworth Town and Battersea. The middle of the borough is a solid swathe of Tory wards from Putney Hill through Southfields, Earlsfield and Wandsworth Common to Clapham Common. Though the council isn't aggressively driving its tenants out of the borough, beyond pushing the "cash-in" of right-to-buy, the refurbishment of existing council housing stock often involves squeezing in new private builds (e.g. the Winstanley Estate at Clapham Junction), which exacerbates the cheek-by-jowl social polarisation.

This is planned immigration, but in a manner peculiar to London, which emphasises how fundamentally different to the rest of the country the capital has become. Long before the Battersea Power Station development was marketed off-plan in Hong Kong, the new flats along the riverside were being bought by buy-to-let investors and rented-out to young professionals, drawn to the capital from all four corners of the UK and the globe. There are signs that this is getting out of control and degrading the social fabric in ways that affect all classes, not just the poor. Enoteca Turi, one of best Italian restaurants in London, is currently under pressure from a landlord who wants to build more boxy flats behind Putney High Steet. Ten primary schools have been sold off to property developers since 1990, leading to the current lack of places in the borough (you can now rent a flat in the Old School Yard development at Eltringham Street for £2k a month). Battersea Sports Centre is to be replaced by affordable housing that everyone knows will be unaffordable for most.

The impact of this change is most obvious during the weekday commute, when the Tube and rail lines are heaving. The evolving plans for Crossrail 2 have been heavily influenced by the increased demand on Clapham Junction, Wandsworth Town and Earlsfield, in addition to the perennial pressure on the Wimbledon branch of the District Line (partially eased recently by new higher-capacity trains). There is even talk of further extending the Northern Line to Clapham Junction. In the circumstances, a foot and cycle bridge across the Thames, linking the US Embassy and an exclusive block of flats patronised by MPs, looks like a folie de grandeur on the part of Wandsworth Council. £40m would cover the construction costs of 5 new primary schools, and there'd be few doubts about the return on investment.

Segregation Tomorrow

Transport for London has confirmed that work will shortly begin on segregated "cycle superhighways" in Central London, due for completion in 2016, augmenting the fragmented blotches of blue paint that currently claim to do the job on some of the capital's roads. There will be an East-West route from Tower Hill to Acton, and a North-South route from King's Cross to Elephant & Castle, the two interconnecting at the north end of Blackfriars Bridge. No doubt the new MP for Uxbridge will be the first to try them out, probably on the longer Acton to Tower Hill route, which will allow for a photo opportunity at Parliament Square followed by lunch in The City. We can only hope the name "Boris lanes" does not catch on.

Coincidentally, the free marketeers at the IEA have issued a proposal to convert various urban rail lines into busways, i.e. dedicated, single-lane roads for high-capacity buses. Leaving aside their ideological antipathy to railways as natural monopolies that the state cannot avoid managing, their case is perfectly rational viewed in terms of minimising cost and maximising carrying capacity, but it will disappear without much trace. The same cost-benefit rationale would indicate that segregated cycle lanes are the worst possible use of a scarce resource, but the odds are that the current plans will lead to more routes in future. So why is it that the political establishment in London is (broadly) keen on cycleways but not on busways?

Carrying capacity (the number of passengers who can pass a specific point in a given period) is essentially a factor of the speed and size of vehicles. Generally speaking, the faster a mode of transport, the lower the capacity because of increased stopping distances (the stopping distance increases by the square of the increase in speed). You can potentially offset this reduction if you increase vehicle size, subject to aerodynamic drag. It is difficult to do this for trains due to the constraints of existing infrastructure (low bridges and limits on platform extension in urban areas), so high-speed railways inevitably end up being premium services enjoyed by the few. Conversely, the high capacity of the Tube is largely down to the relatively slow speeds dictated by short runs between stations and Victorian engineering.

Buses are potentially higher capacity than trains because of better braking (rubber on tarmac is superior to steel on steel) and upper decks (assuming you avoid low bridges and trees). The problem is that they are in competition for road space with cars and lorries, though this is elsewhere an advantage in that they can flexibly serve low-use routes - e.g. minibuses in rural areas. Railways have the advantage of dedicated corridors in urban areas by which they can carry relatively large numbers quickly into and out of city centres. Without this, nobody would ever build a railway (of course, without railways, you can't easily build large cities). Aeroplanes are far cheaper over longer distances (you don't have to build sky), but their capacity is constrained by speed, distance from urban centres and limited runways, as well as externalities such as noise and air pollution.

A dedicated busway makes sense in terms of capacity, but it is also attractive (to a certain mindset) because it creates two classes of road: mass transit for the majority in parallel with mixed-use roads for a minority who can afford tolls (e.g. the congestion charge). As with most libertarian fantasies, this boils down to segregation. The problem with converting existing railways to busways is that the tracks used by commuter trains are also often used in part by inter-city trains. Where routes aren't mixed use, they've usually been incorporated into light-rail systems already (e.g. the Overground in London). Where busways have been implemented, they are usually new-builds in expanding cities where land values are relatively cheap (e.g. South America).

Arguably, a better approach for London would be to convert existing roads to dedicated busways (the logical extension of bus-lanes), but that would be inconvenient for car and van-drivers, which is why the IEA doesn't argue for it. This reluctance to offend drivers is matched by the popularity of trains with the middle-classes, which together limits the potential for the re-purposing of either roads or railways. This in turn explains why schemes that carve out road capacity for cycling can only succeed where they clearly benefit the influential upper middle classes, which is why a cycleway between The City and Acton (crossing Hyde Park and skirting Notting Hill) is being referred to admiringly by both the cycle lobby and the Evening Standard as "Crossrail for bikes". The shorter North-South route will cement the gentrification of Elephant & Castle.

Cycleways are low capacity. High-capacity platoon cycling, i.e. where everybody chugs along in a group at a common speed, was the norm before mass car-ownership but is now a distant memory, even in China. In an environment with vehicles travelling at different speeds, the fastest effectively dictates the carrying capacity because of the natural desire to maintain safe distances (the proposed TfL routes are two-way, i.e. you have to avoid on-coming traffic). Once you get racing bikes, mountain bikes and fixed-gear bikes on the roads - the result of wealth plus concerns over fitness and the environment - you reduce carrying capacity due to competition. This is not just testosterone, but the result of the plurality of bike capabilities, personal objectives (working up a sweat versus transport) and attitudes towards risk (exemplified in jumping lights, which will still be a problem with segregated routes that intersect with roads and pedestrian crossings).

Because of modern cycling manners, the per capita capacity demanded by cyclists will always be in excess of other modes of transport. This is a triumph of the individual over the collective, and thus an inefficient use of road space and transport spending. Cycling has become popular with politicians not just because it is seen an environmentally-friendly, with the added cultural bonus of an image that mixes the common touch, the fashionable and the slightly lairy, but because it is emblematic of constant striving and individual achievement. Like marathon running, it is an exemplary neoliberal mode of transport - i.e. elitist and antisocial (this is sidestepped by cyclists who habitually cast themselves as victims). Whereas segregation once meant denying access to others, now it means opting out. Arguably, it has done ever since the 1960s.

Cycle superhighways are part of the emerging urban transport environment in which segregation between different modes in city centres is not just a practical necessity but a means of status identification - i.e. a privilege. The further expansion of the segregated cycle network in London will depend on the reduction of existing road traffic, which may be achieved through a combination of autonomous vehicles (Uber increasingly looks like a stepping-stone) and more expensive tolls. Once, the chief difference between urban and suburban transport was underground. In the future, it will be overground. The city gates of old will be reintroduced, just further out.

Driving Me Crazy

As if driverless cars weren't exciting enough, we are now told they could be a target for hackers intent on causing chaos. This was spun by some media outlets as the promise of terrorism, which shows that the government line that uncontrolled Internet access is a threat to society has been successfully internalised. According to the UK-based Institution of Engineering and Technology, "If we have the hacker community start to target vehicles, we can imagine a fair amount of chaos". Why only a "fair amount"? Let your imagination run wild. I'm thinking remote-controlled carjacking, like a mashup of Grand Theft Auto and Police, Camera Action!.

Most of the press coverage has focused on the equation of hacking with disruption (and not in the business-bollix sense of that word): "Unfortunately living in the world today people do try to tamper with technology". The phrase "living in the world today" is grammatically redundant but it helps suggest that there is a happier, purer realm where this sort of bad behaviour does not occur. What this patronising twaddle ignores is that most technological progress is the result of hacking and tampering, i.e. experimentation and repurposing. For example, the Internet is the result of various academics repurposing spare computer time and network bandwidth.

It is significant that the car-hacker meme should prove popular in Britain. To be hackable, a driverless car must support two-way communication with a surrounding infrastructure - i.e. it has to be capable of taking instruction. As the name suggests, a fully-autonomous car (which is what many American advocates want) would not be controllable in this way, in which case hacking would require physical intervention (the digital equivalent of hotwiring). The IET, which is a pro-infrastructure lobby, reckon: "There are clear safety benefits in getting vehicles to drive optimally and at a particular speed while interacting with the infrastructure. We're moving towards co-operative systems. The first trial will happen in the UK in January. Vehicles and traffic lights will be talking to each other – that's the first step." Presumably the second step will be for GCHQ to listen in on the conversation.

There was also ample evidence of the IET's dubious understanding of technology in its comments on the software that driverless cars will use: "Recent reports analysing software show that 98% of applications have serious defects and in many cases there were 10-15 defects per application ... If ultimately you want to use autonomous vehicles, we need to make sure they don't have a defect". That headline figure relates to all software, not to critical packages whose failure might imperil life. It's also worth pointing out that "defect" is a broad term that covers more than just bugs. It includes trivial feature deficiencies and cosmetic preferences. In terms of hacking, an exploitable vulnerability (which is what you need to worry about) could be the result of a bug, but it's more likely to be the result of bad design (e.g. an open backdoor) that isn't classed as a defect. The IET are advocating state regulation of the software. This is not a bad approach per se, but it raises questions about which state agencies will be involved.

Some media picked up on the research finding reported by the IET that in a mixed environment manual car drivers ended up copying driverless cars, leaving shorter braking distances and thus causing more accidents. Again, this has a particular ideological resonance in respect of the relationship of the individual and the infrastructure: we must protect you from yourself. This backs up my own theory that driverless cars will only happen as a result of government diktat and strict segregation, because the chief benefits, such as increased road capacity and fewer accidents, can only arrive when automated cars are mandatory and the non-automated outlawed within a particular area, which almost certainly means high value city centres.

Transport policy is rich in hyperbole because of its emblematic associations with progress (railways, jet packs) and personal autonomy (the freedom of the road). In the US this encourages preemptive "libertarian" attacks on federal regulation ("say no to Obamacar"). In the UK we get the man from the ministry annex warning about cyber-carjacking and trying to persuade us that what we need is a virtual chauffeur under the control of the state. To get a better idea of what the reality of driverless cars might look like, it's worth employing three traditional memes that the British media regularly recycle, which tell us a lot about national attitudes to transport policy.

1. The US hates pedestrians --- According to Ben Okri, "There are cities in America where you can’t get anywhere if you don’t have a car". This myth is the flipside of the British habit of regarding pavements as a human right, to the point of treating dogshit as a political totem. Of course, it didn't stop us building plenty of new towns and exurban estates without pavements over the last 50 years, just like the US did. I spent my teenage years in Washington, near Sunderland, where desire paths crisscrossed the "highway" verges (pavements? what luxury!). In fact, the two countries (and developed nations generally) are very similar in terms of urban transport policy, which has been increasingly pro-pedestrian since the emergence of New Urbanism in the 90s.

Walking is a class issue. During the postwar era in the US, getting about on foot came to be seen as the recourse of the poor. I recall walking in car-friendly (but getaboutable) Houston in the late 80s and noting that my fellow pedestrians were mainly Latino maids knocking off from a shift at the hotel I was staying in. In the UK, we cultivated that attitude to an extent (the middle-class signifier of the driving coat and open-back gloves, like car-keys at a swingers' party, was big in the 70s), but still retained a residual respect for walking as a democratic practice, which probably reflected the UK's greater and longer-established urbanism and the less extensive "white flight" of the 60s and 70s. The "US hates pedestrians" meme was a self-congratulatory boast on our part.

As the suburbs have lost their sheen and inner-cities have been gentrified, walking has been reclaimed by the middle classes (the recuperation of psychogeography and the dérive in the 1980s was an intellectual outrider of this tendency). Together with the vogue for cycling, this has significantly increased transport costs because of the need to provide multiple routes and segregation in built-up areas. The response has been a trend towards shared spaces, which is why driverless cars are often pictured as non-threatening golf-buggies, pootling along as they carefully avoid cyclists and pedestrians.

2. Traffic speed in central London is no faster today than in the Victorian era --- This curio is often taken as evidence that we're technologically stagnating and might as well still be using horse-drawn carriages. In fact, it has long been known that the average traffic speed in urban areas is determined by the minimum that people will tolerate, not by technology, and that this speed is 9mph (roughly three times normal walking speed and double "hurrying" speed). This is self-regulating. When congestion increases and the speed drops lower, people avoid travelling and congestion eases. If congestion decreases to the point where the average speed exceeds 9mph, this attracts more traffic and congestion increases.

Even if we had jet packs, we'd still be travelling in town at 9mph (which means we'll need to wait for anti-gravity suits as jet propulsion is shit at low speeds). Given that driverless cars can most easily be introduced in city centres, this suggests that vehicles designed to be optimal at around 9mph will be the order of the day. They will be able to go faster, but I suspect they'll max out at 20mph as a reassurance to pedestrians and cyclists. It is also doubtful that car capacity will increase significantly, because of mixed use constraints, so city centres will remain as they are today, areas that are dominated by the cars of the rich.

3. We're a small island --- This is a flexible meme that is deployed in a variety of arguments, from limiting housebuilding to reducing immigration. We are in fact the ninth largest island on Earth. Most of the larger ones are covered in ice (Greenland, Baffin Island), impenetrable mountain-ranges (New Guinea, Borneo), or highlands unsuitable to dense habitation (Madagascar). There are essentially two large "sweet spot" islands that combine rich agricultural soil, easily-accessible resources and proximity to trade routes: Great Britain and Honshu, Japan's main island. The most habitable bit of the former is England, suggesting that Cecil Rhodes' remark about life's lottery has a material basis even if it is an objectionable sentiment.

The unthinking acceptance of this meme is largely a result of city-dwellers (and particularly Londoners) feeling cramped and the residents of small towns in England not getting out enough. A theoretical selling point for driverless cars is that they can allow for an increase in effective road capacity (though I doubt this will happen in practice). In other words, the acceptance of autonomous vehicles can be presented as an alternative to additional road building or widening. Though this is largely spurious, it is an effective way of selling driverless cars that simultaneously encourages the belief that they are particularly suited to congested urban areas.

What I think the collective lens of these memes shows is that driverless cars will initially be little more than a futuristic version of the sedan chair. Found largely in city centres, employed mainly by the well-off, and possessing the properties of a limousine: quiet, smooth, and with a built-in screen and minibar. The malicious hacking threat is not that a terrorist might try and turn you into a suicide ram-raider, crashing into the Downing Street gates at 20mph, but that you might be inundated with video-spam.

Curb Your Enthusiasm

Paul Krugman, who has long cultivated the fertile lands between Sci-Fi and economics, has been thinking about the implications of "IT-mediated car services" like Uber. He avoids mentioning robot drivers, perhaps to prevent the discussion tail-spinning into angst about capital-labour substitution before the madness of cars gets a proper airing: "when you think about it, for most people owning a car is quite wasteful. It’s an expensive item of equipment that sits idle most of the time; it requires parking (and often a parking structure) both at origin and at destination; it requires maintenance and is a big hassle all around". In other words, it is an inefficient use of capital that involves a significant waste of land.

The promise of Uber et al is that "reliable, quick-response chauffeur services could free many people from the need to tie up all those resources in a consumer durable that they only use now and then. And from a social point of view it would avoid the need to tie up so much capital that sits unused most of the time". The implication is that the capital could be put to more productive use (from a social point of view) elsewhere, though Krugman is coy about recommending increased investment in public transport, which would simply bring the anti-state harpies down upon him. Instead, he seems keen to get marginalists onside by echoing the thoughts of Tyler Cowen, who previously advocated the incentive pricing of parking, in respect of capacity.

"There is, however, an obvious problem: rush hour. Peak car use comes twice a day, and that would seem to dictate that we have nearly as many cars as we do now even if they’re supplied by the likes of Uber. But here’s where surge pricing comes in. If traveling during peak hours is more expensive than off-peak, people will have an incentive to shave off those peaks. People who aren’t commuting to work will avoid travel at peak hours; some people will find other ways to travel; some people (and businesses) will rearrange their schedules to take advantage of cheaper off-peak travel".

As with all incentive-based arguments, the first question to ask is: who are these "people" of whom you speak? If traveling during peak hours is more expensive than off-peak, then peak-time travel will be dominated by the better-off. You could spin this as a form of progressive taxation, but the reality is that peak hours will only command a premium if they are a more attractive good. In other words, this is a system in which the less well-off exchange relative inconvenience for a discount on travel costs (unlike the democratic basis of public transport). While there will always be some individuals whose time preference makes this a win-win, aggregate satisfaction must be reflected in the time-slot price. The most popular slots will cost the most.

Though his blog post is provocatively titled "Life without cars", what Krugman actually envisages is "a society that still relies mainly on cars to get around, but manages to do this with significantly fewer cars than we need at present", which is a pretty accurate thumbnail sketch of New York, where the incentives of housing density, land value and loss of utility (i.e. traffic jams), as well as decent public transport, mean that more households are car-less than own a vehicle. It would be easy to suggest that familiarity with limos makes Nobel laureates comfortable with services like Uber, and easier still to suggest that well-paid economics professors like the idea of buying marginal services while investing their capital for yield, but Krugman is clearly in tune with the zeitgeist.

The wider secular trends are the move from ownership to subscription (already seen in many other areas) and consequent concentration of capital; the emergence of a generation that considers ownership of both homes and cars to be unfeasible in the short-term, if only because all their capital went into tuition fees; growing concerns about the environmental impact of cars (which is not unrelated to the decline of car manufacturing in developed nations); and the increased physical control of city centres and public spaces, variously sold on the grounds of security, "traffic management" and pollution reduction (London is well ahead of the field here).

Massively open online car schemes (hey, MOOCS!) may prove to be a stepping-stone to the introduction of robot cars in metropolitan areas - i.e. first get the infrastructure of car pools in place and then substitute the drivers. They promise a brighter and better Sci-Fi future, with minimal discussion about the changing landscape of power. As Krugman himself said (in the Wired interview linked to above), "Evil will come in stylish, Steve Jobs-inspired designs".